INSIGHT-What's in a scent? Perfume makers adapt to EU rules

PARIS, July 7 Seaweed may not be the first
ingredient that springs to mind for perfume. But algae are among
obscure ingredients to which perfume makers are turning to
preserve the scent of their fragrances in the face of new EU
anti-allergy restrictions.

The global high end perfume industry, generating $25 billion
in annual sales, is readying itself for EU regulations that will
come into force in early 2015.

These will ban widely-used ingredients such as oak moss, a
natural substance, that was found in the original versions of
best-sellers including Chanel's No.5 and Miss Dior.

Perfume creators say they love oak moss for its woody,
earthy notes which give it depth and help make scent last
longer. But on the grounds that between one and three percent of
the EU population could suffer an allergic reaction - such as
dermatitis - Brussels is banning two of its core molecules,
atranol and chloroatranol.

Perfume makers will only be allowed to use oak moss from
which these two molecules have been removed. The makers say this
results in a much lighter and less vigorous scent.

Corticchiato, like many other "noses," is anxious about the
new wave of potentially costly rules emanating from Brussels.

The fragrance industry that supplies perfume makers like
Corticchiato already has its own self regulation body - the
International Fragrance Association (IFRA) - financed by
providers such as Givaudan, New York-listed
International Flavors & Fragrances, and Germany's
Symrise. It has imposed restrictions on a growing list
of ingredients over the years for various health reasons.

In addition, perfume makers do a lot of their own in-house
and post-market surveillance and do their own testing, which can
cost several hundred thousands euros a year, depending on the
number of products and ingredients involved.

Leading brands such as Chanel, Dior and Hermes have 'noses'
and their own research laboratories. They do not publish figures
for the costs associated with them but industry experts estimate
them to be in the order of several million euros a year.

A TOUCH OF ALGAE

One solution for oak moss, Corticchiato says, is to add a
touch of algae as its wet, iodized smell coupled with other
ingredients, can help recreate oak moss' mouldy character.

The European Commission is also banning a synthetic molecule
called HICC, or lyral, which replicates the smell of lily of the
valley. It too can cause dermatitis in allergy sufferers.

L'Oreal, which makes Lancome and Armani perfumes,
said it was looking for alternatives. It declined to say which
of its perfumes contained lyral.

Perfume makers say they understand that their products need
to be safe and recognise how damaging to their reputation any
serious allergic reaction would be.

But some say the industry is being unfairly targeted. Up
until now, they say, there have only been minor cases of
allergies manifested by skin irritations or eczema.

"I think Brussels' focus is a little exaggerated specially
compared to alcohol and cigarettes which are sold freely and do
more harm than perfume," says Patricia de Nicolaï who created
the French Nicolaï perfume brand with her husband 25 years ago.

She says she has never received a complaint about allergy
but has reformulated some of her best sellers such as New York
and Eau d'Ete because they used oak moss and lyral respectively.

The European Union denies targeting perfume any more than
any other industry and says its new regulation seeks to address
scientists' and doctors' concerns about the health hazards
related to the use of perfume.

NORTH-SOUTH PERFUME LINES

Some inside the perfume industry say lobby groups
representing the interests of tobacco firms are better financed
and better organised than those representing perfume makers.

One reason is the sheer size of the global cigarette
industry. In sales terms, it is more than three times the size
of the perfume industry. Cigarette lobby groups include the
tobacco manufacturers' association and the tobacco retailer's
alliance.

By comparison, perfume makers rely on Cosmetics Europe, a
bulky organisation that represents 4,000 companies including
deodorant, toothpaste and perfume providers which have very
disparate interests.

Even within the perfume industry, there is no united front
as some brands are more affected than others by IFRA and new EU
regulation.

One of the industry's biggest players, L'Oreal, says it uses
mainly synthetic ingredients in its perfumes. These ingredients
raise fewer allergy concerns than natural products found in
niche perfumes and brands such as Chanel and LVMH's Dior and
Guerlain.

Another issue is that perfumes are not protected by
intellectual property rights. The composition of a perfume is
not legally recognised as a "creation of the mind" but rather an
industrial formula that can be replicated and altered.

"Many perfumes have had to be reformulated even though they
were considered masterpieces due to changing legislation," said
Olivier Maure, head of Accords et Parfums, a supplier of major
brands including Dior based in Grasse, likening it to "changing
the colours of the Mona Lisa".

Some industry executives say Brussels' recent focus on the
perfume industry stems from its main advisory body, the
Scientific Committee on Consumer Safety (SCCS). Many of the
committee's members come from northern countries such as Sweden
and Denmark where there is opposition to perfume on health
grounds.

"Clearly, there are more experts at the SCCS who are based
in northern Europe than in the south but it is not a deliberate
choice," said David Hudson, spokesman for consumer policy at the
European Commission. "We strive for geographic and gender
balance but the primary selection criteria is expertise."

Perfume is not as important to the economies of northern
Europe as it is to southern countries. Perfumes and cosmetics
are among France's top five exports and the southern city of
Grasse is the historic capital of the perfume industry where
many leading brands such as Chanel, Hermes and Dior source their
essences.

Added to that, research shows people from northern regions
tend to be more vulnerable to allergies than those living around
the Mediterranean. One theory is that people in northern
countries are more susceptible because of their lifestyle and
generally cleaner environment.

MORE RESTRICTIONS TO FOLLOW?

The SCCS published a report in July 2012 which recommended
banning oak moss's core molecules and severely restricting the
use of many core ingredients such as linalool, found in
lavender, a move that threatened the high end of the perfume
industry which relied heavily on these ingredients.

Brussels included a few of the SCCS's recommendations, such
as its ban on oak moss, and pledged to investigate what levels
of concentrations could be considered safe for natural
ingredients so that consumers did not develop allergies to them
over time.

Perfume makers are worried that this will lead to more
restrictions. There have been suggestions that they should offer
two types of perfumes - some with allergens in them and consumer
advice about the content, and others with no allergen.

"I expected big groups to take the initiative on this matter
but it turns out that they are the most risk averse," said
Corticchiato. One problem for big perfume brands is that their
label sells a dream which is incompatible with the message "this
product may cause allergies."

Dior, Guerlain and parent LVMH declined to
comment for this article as did Hermes.

Chanel said it stopped using lyral in 2010 and has been
evolving its formulas in anticipation of new rules.

"At Chanel, we follow very closely talks about regulation
and scientific findings concerning raw materials," Jacques
Polge, Chanel's chief perfume creator for 36 years, said in an
emailed response to questions.

Polge said Chanel controls its formulas and supply chains to
ensure its natural oak moss is bereft of the allergens targeted
by Brussels. That way, "we can respect the original scent".

But "once you change an ingredient or two it can be very
difficult to keep the scent absolutely intact, especially if
those ingredients played an important role in defining the
scent," says Maurice Roucel, creator of many perfumes including
L'Instant for Guerlain and Hermes's 24 Faubourg.

A few years ago, Roucel reformulated Dior's Fahrenheit
perfume to remove lyral along with a few other ingredients and
he is now working on the reformulation of about eight perfumes
to make them meet new regulation.

"Big brands tell me: replace this and that and make sure it
smells the same and costs the same to produce," Roucel said.

Dec 9 Coca-Cola Co said on Friday that
Muhtar Kent would step aside as chief executive next year and be
replaced by James Quincey, a company veteran credited with
several recent changes to help the company cut its dependence on
sugary drinks.

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